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3 Tax Benefits of Owning a Home

Jul 05, 2019

Mortgage Interest Deduction

One of the largest tax benefits of owning a home is the ability to deduct mortgage interest from your Federal Income Tax Return. In other words, if you itemize your deductions, interest that you pay on your mortgage is tax deductible, within limits. 

While you can potentially claim a deduction for any interest that you have paid on mortgages, not all interest paid towards a mortgage is tax deductible. It’s best to speak with your lender to determine what exactly qualifies for mortgage interest deduction.

Tax Deductions

The higher your property taxes are, the larger the deduction you can take on your taxes.

It’s important to keep in mind that you must claim your deduction in the year you actually make your payments. The property taxes, mortgage insurance, and the interest payments that you make are deducted from your taxable income; thus, you pay taxes only on the remaining income. This has the potential to help you save a lot of money over time.

Mortgage Points Deduction

Your mortgage lender will charge you a variety of fees, one of which is called mortgage “points” that you pay your lender at closing to receive a reduced interest rate. Typically, one point is equal to 1% of your loan value.

If you decide to pay points on your mortgage , they may work as a tax reduction. If the mortgage is on your primary home, you may be allowed to take a full point deduction right away. Otherwise, you may still be able to take the deduction, but it will need to be spread out over the life of your loan.

By purchasing points, you can save money in the long run if you stay in the home for a certain period of time, depending on the amount of points you purchase.

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Buying a home can be very intimidating and the no strings attached feeling renting can give someone sometimes seems like the easier option. But that isn’t always the case. There are many situations where it makes more sense to purchase your home instead of continuing to rent it year after year. There are alot of […] The post The Benefits of Buying A Home Over Renting appeared first on Owings Mills & Lutherville Mortgage.

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What is a Renovation Loan?

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The home buying process starts with figuring out the location of where you want to live. This can be extremely overwhelming with a lot of different scenarios to think about and a lot of decisions to make. Here at Ken Venick, we want to make the home buying process as easy as possible and that […] The post 5 Important Tips A Homeowner Should Know When Narrowing Down An Area To Live In appeared first on Owings Mills & Lutherville Mortgage.

Why Is Your Lender Requiring You To Have A Co-Signer?

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Money Moves To Make When Your Interest Rates Are Low

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The Federal Reserve has said it will keep it’s interest rates close to zero, but it wont stay this way for long. Homeowners have been quick to put their houses on the market since more and more buyers are on the prowl are on the hunt for a new place to call home.      […] The post Money Moves To Make When Your Interest Rates Are Low appeared first on Owings Mills & Lutherville Mortgage.

5 Home Renovations With The Highest and Lowest Returns

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Home renovations are one of the hottest topics in 2021. It gives an owner the chance to turn their space into exactly what they need it to be, whether they have just moved in, making more room, or getting ready to put it on the market. Home renovations can increase the value of a home […] The post 5 Home Renovations With The Highest and Lowest Returns appeared first on Owings Mills & Lutherville Mortgage.

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